Reynolds American talks benchmark seven-tranche offering of senior notes for Tuesday pricing

By Aleesia Forni

Virginia Beach, June 9 – Reynolds American Inc. is in the market with a benchmark seven-tranche offering of senior notes (Baa2/BBB) on Tuesday, according to a market source and a 424B5 filed with the Securities and Exchange Commission.

The offering includes three-year notes talked in the 165 basis points area over Treasuries and a three-year floater talked at the Libor equivalent, five-year notes talked in the 185 bps area over Treasuries, seven-year notes talked in the 205 bps area over Treasuries and 10-year notes talked in the 225 bps area over Treasuries.

A 20-year tranche is talked at Treasuries plus 280 bps to 285 bps, and a 30-year tranche is talked in the 300 bps area over Treasuries.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Fifth Third Securities, Goldman Sachs & Co., Mizuho Securities, RBC Capital Markets LLC and Scotia Capital (USA) Inc. are the bookrunners.

Proceeds will be used to fund the company’s acquisition of Lorillard Inc.

Reynolds American is a Winston-Salem, N.C.-based manufacturer and seller of cigarettes and other tobacco products.

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